A 5/1 ARM loan:
- charges a 5% interest rate for the 1st year and fluctuates every year after that
- charges a 1% interest rate for 5 years and then fluctuates with the market every year after that
- has a fixed rate for the first five years and has a rate that changes once each year for the remaining life of the loan
- requires a 20% down payment
C is the answer.